1031 Exchange

A 1031 Exchange is one of the best ways to legally defer the 20%-35% capital gains tax that would otherwise be due on the sale of a property. By utilizing a 1031 Exchange, you can defer those taxes by reinvesting proceeds from the sale of the original asset to another investment property, keeping your capital working for you.

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Process Overview

The value of the replacement property must be equal to or greater than the value of the relinquished property to obtain a full deferral. Any proceeds that were not reinvested would be subject to capital gains tax. The seller has 45 calendar days to identify three possible replacement properties and 180 days to close on the replacement property.

Apartment

Day 1

Day 45

Day 180

Sell

Property

Identify

Three Properties

Purchase

Property